Published: 11/01/2012

For many of us, our homes are the most important possession we have – not just in terms of their value, but also for both the literal and symbolic protection they offer us and our families. And it can often make sense to protect the investment of time, money and love we make in our homes with a life insurance policy or critical illness cover to protect against losing the roof over our family’s head if the worst should happen.

However, according to research by Sainsbury’s Life Insurance, many people in the UK seem to be neglecting this. The study found that four out of ten mortgage holders have no life insurance protection for their policy. For those aged 35-44 – the group that is the most likely to have dependants – a third did not have insurance.

All this could mean that seven million people do not have a policy in force, the company says, a figure that could lead to some £245 billion in unpaid mortgages.

Reasons to cover up

With family budgets being squeezed hard, some are prioritising other bills and choosing not to pay for insurance. Alternatively, they may simply feel that it is not essential. However, it can be potentially dangerous not to ensure that debt is taken care of if something happens to those who provide for the family.

If you have dependants, then you are likely to want to know that they can carry on living at a reasonable standard if you were not around – and therefore life cover could be a particular concern for those with children.

Another spur to taking out cover can be when you become a parent. Clearly, being able to provide for a young family precisely when they are at their most vulnerable is a huge incentive.

But even grown-up children tend to rely on their parents for longer these days, with some living at home well into their twenties. Likewise, with people tending to live longer, you may find that you become responsible for elderly parents at exactly the same time that your own children have grown up, but are still largely dependent upon you – for example, when they are at university.

But even if you have no dependants, you may find that having a life insurance policy in place can be a good idea. While couples or even single people may feel that they can get away without cover, they could leave a partner or other family member with the responsibility of keeping up the payments on an inherited mortgaged property.

While naturally enough we may not want to think about a time when we won't be around, having the right life insurance cover in place can at least help make sure that those left behind are protected financially. Remember that being up-front about any conditions you may have is of crucial importance when applying for cover such as life insurance, as your situation will be fully examined by an underwriter, and the information and your circumstances used to produce your quote. By not disclosing health conditions you know about, you may invalidate your policy.

Issued by Sainsbury’s Finance

Sainsbury’s Finance is a trading name of Sainsbury’s Bank plc. All information correct at time of publication, but may be subject to change. Any views or opinions expressed in this article are the responsibility of the author and do not necessarily reflect the views of any part of the Sainsbury’s Group of companies.